Filling in Retirement Planning Gaps During Long-Term Care Awareness MonthIf your retirement plan doesn’t account for future long-term care needs, it may be incomplete. The majority of retirees will need long-term care at some point, but the associated costs can come as a surprise. November is Long-Term Care Awareness Month, a good time to find and fill the gaps in your plan.
Common Misconceptions Can Create Planning Gaps
Long-term care goes beyond medical care, so health insurance often doesn’t cover it. Unfortunately, many people don’t realize this.
The Administration for Community Living (ACL) explains that long-term care refers to a range of services and supports that satisfy personal care needs. Examples include help getting dressed, making meals and getting to appointments. Approximately 70% of people will need long-term care support at some point, according to the ACL.
Medicare provides some coverage for skilled nursing care, but it does not cover many long-term care needs. Even so, many people assume it will. The 2025 Nationwide Retirement Institute Long-Term Care survey found that 58% of surveyed adults believe that Medicare covers long-term care needs. When people assume that their future long-term care needs will be covered, they may not take steps to prepare.
The Rising Cost of Long-Term Care
According to the 2025 Milliman LTC Index, a 65-year-old would need to set aside an average of $135,000 today to cover expected long-term care costs. Women tend to have higher long-term care costs, in part due to their longer life spans.
Long-term care can be incredibly costly, and it’s getting even more expensive as the aging population increases demand for services. According to AARP, the cost of adult day services increased by 33% between 2019 and 2024, while the cost for home health and assisted living services increased by nearly 50%. Rising costs mean that people who are planning for retirement can’t count on today’s prices. They also need to account for inflation and the potential for significantly higher future expenses.
How Long-Term Care Costs Can Affect Retirement Plans
For retirees living on a fixed budget, unexpected long-term care costs can upend retirement plans.
Consider a couple who have determined they have just enough money for retirement. Then when they are both 70, the husband’s health deteriorates, and he needs more care than his wife can provide. Over the following years, they tap their savings accounts to cover around $100,000 in long-term care costs. After the husband dies, the wife may find that the unexpected care expenses have significantly reduced the assets available to support the remainder of her retirement.
Long-term care costs can also be financially disruptive for solo retirees and their estate plans. A retiree who drains their savings may qualify for Medicaid coverage of long-term care. However, Medicaid may try to recoup long-term care and medical spending through estate recovery, and the state may place a lien on the individual’s home. According to the National Consumer Law Center, there have also been reports of nursing homes suing the children, siblings, spouses and even friends of residents to try to recoup costs.
Family Caregiving Has Limits – And Costs
Instead of moving into an expensive nursing home or assisted living facility, some people hope to remain in their homes, where they may depend on unpaid family caregivers for support. However, this isn’t always practical.
Some people simply need more support than family can provide. For example, if someone needs help with mobility, a family member may not have the physical strength required to provide assistance. Individuals with dementia or other health conditions may also require more support than the average, untrained person can provide.
Unpaid caregiving can also create a financial strain. According to the Center for Retirement Research at Boston College, 56% of employed family caregivers report having to go in to work late, leave early or take time off due to their caregiving responsibilities, while 18% say they reduced their hours and 16% say they took a leave of absence.
Planning for Future Long-Term Care Needs
Understanding your potential long-term care needs is an important part of building a more resilient retirement strategy. You may choose to set aside assets for future care expenses, purchase long-term care insurance or consider a hybrid life insurance policy that includes long-term care benefits. The right approach will depend on your financial situation, retirement goals and preferences for future care.
Heffernan Insurance Brokers can help you evaluate your insurance options as part of your broader financial strategy. Contact us to learn more.
